Cisneros Forms Company to Build Homes
Henry Cisneros, the former U.S. housing secretary, has resigned as president of Spanish-language broadcaster Univision Communications Inc. to start a company that will develop affordable residential communities in the central areas of several of the nation’s largest cities, including Los Angeles.
American CityVista will be a joint venture with Westwood-based Kaufman & Broad, one of the largest U.S. home builders. Cisneros will serve as its chief executive and chairman and will hold a majority stake in the new company. It will focus primarily on building lower-density, single-family homes and small townhouse complexes in the central city areas of Los Angeles, San Antonio, Phoenix, Las Vegas and other metropolitan areas, including Orange County.
A. Jerrold Perenchio, chairman and and chief executive of Los Angeles-based Univision, will assume Cisneros’ duties in the near term. Cisneros also resigned from the company’s board.
“There is a great demand for homes in central neighborhoods,” Cisneros said. “Housing is the American dream, now more than ever for minorities and immigrants. We want to build homes the average American family can afford to buy.”
American CityVista, a limited partnership to be headquartered in San Antonio, will be co-funded by Cisneros and Kaufman & Broad. Although the partners declined to discuss their initial investment in the venture, they said they expect it to be profitable two years after its launch, set for September. They plan to produce 2,000 homes a year by its third year of operation.
The first Southern California communities targeted for redevelopment include Huntington Park, Reseda, San Fernando, Sylmar, Santa Ana, Fullerton and Anaheim, as well as Inland Empire sites.
Bruce Karatz, Kaufman & Broad’s chairman and chief executive, said the new company is targeting older communities with an established infrastructure, including schools, roads and utilities, that have expressed an interest in changing some zoning from industrial to residential. The plan calls for “villages within cities” in areas builders have traditionally shied away from.
“This project will be challenging,” Karatz said. “If it were easy, we wouldn’t need Henry Cisneros. He’s widely respected and believes strongly in this goal.”
Cisneros, 52, served as mayor of San Antonio for eight years, and will return to Texas to run American CityVista.
Cisneros, who served as HUD secretary for more than three years under President Clinton, said that he sees “new urbanism” as an opportunity to build homes with all the amenities homeowners want today, but at a price average Americans can afford.
“This will be very difficult because the easy pickings are already gone,” he said. “What’s required is imagination in acquiring land, and cooperation from local governments.”
The so-called infill communities--central city areas that have long been ignored by developers--are targeted for middle-income, first-time buyers who have been shut out of the marketplace and who want to live in metropolitan areas close to their workplaces.
Kaufman & Broad stock soared $2.63, or 13%, to $22.75 Monday amid a broad rally in home builders’ stocks.
Bloomberg News was used in compiling this report.
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* BUILDERS ON RISE
Stocks of most leading builders soared on heavy volume. C4
